The current FUTA tax rate is 0.6% , and the SUTA tax rate is 5.4% Both taxes are applied to the first 7,000 of an employee's pay.Assume that an employee earned total wages of 2,900 in the current period and had cumulative pay for prior periods of 5,800 . What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period? 348.00 174.00 420.00 0.00 72.00

To determine the amount of unemployment taxes the employer must pay for the current period, we need to calculate both the FUTA and SUTA taxes based on the employee's wages.<br /><br />1. **Determine the total wages subject to unemployment taxes:**<br /><br /> - The maximum wage base for both FUTA and SUTA is \( \$ 7,000 \).<br /> - Cumulative pay for prior periods is \( \$ 5,800 \).<br /> - Current period wages are \( \$ 2,900 \).<br /><br /> Since the cumulative pay plus current period wages (\$5,800 + \$2,900 = \$8,700) exceeds the wage base of \$7,000, only a portion of the current period wages will be subject to unemployment taxes.<br /><br /> Wages subject to unemployment taxes in the current period:<br /> \[<br /> \$ 7,000 - \$ 5,800 = \$ 1,200<br /> \]<br /><br />2. **Calculate the FUTA tax:**<br /><br /> - FUTA tax rate is \( 0.6\% \).<br /> \[<br /> \text{FUTA Tax} = \$ 1,200 \times 0.006 = \$ 7.20<br /> \]<br /><br />3. **Calculate the SUTA tax:**<br /><br /> - SUTA tax rate is \( 5.4\% \).<br /> \[<br /> \text{SUTA Tax} = \$ 1,200 \times 0.054 = \$ 64.80<br /> \]<br /><br />4. **Total unemployment taxes:**<br /><br /> \[<br /> \text{Total Unemployment Taxes} = \text{FUTA Tax} + \text{SUTA Tax} = \$ 7.20 + \$ 64.80 = \$ 72.00<br /> \]<br /><br />Therefore, the amount of unemployment taxes the employer must pay on this employee's wages for the current period is \(\$72.00\).